Adapt or die - that’s the underlying message of the latest PwC future of claims report. PwC predicts large swathes of future claims will be settled with little or no human involvement, and will instead be driven by automated intelligent technology.
So, what does that mean for the human adjuster?
Insurance claims teams can coexist healthily in this tech-driven environment as long as they focus on the opportunities this transformational change represents, according to PwC, such as better claims handling, removal of low value tasks and enhanced analytics to continuously improve products and services.
The report, launched to coincide with the Lloyd's Market Association’s (LMA) Future of Claims Forum, says success will require the re-training of people whose roles are likely to be impacted by technology and the sourcing of new talent from different areas.
“The insurance industry is alive to the fact that technology will disrupt everything they do and, in some cases, this change is already well underway,” said Jim Bichard, UK insurance leader at PwC. “The impact will be felt differently by each firm - personal lines will react differently to commercial insurers, reinsurers and brokers - but all sectors need to take action now.
“Individual companies can’t guard against job losses resulting from automation, but this isn’t just about jobs - it’s about people. Insurers can ensure they remain competitive by investing in re-training and supporting their existing employees to ensure they’re fit for the future workplace.”
As technology slowly but surely redefines the claims process, PwC expects insurers to focus more on preventing losses from happening in the first place. For example, sensors and tracking data will be used on containers and ships to automatically trigger and validate claims payments for lost and/or damaged cargo.
Such developments are likely to result in the reduction of overall claim numbers, meaning insurers could - and should - focus their energy on improving the experience of the customer and developing new services and products. This means companies will increasingly be looking to employ people with customer centric soft skills, as well as those with expertise in analysing data, who can create tailored, personal offerings for customers.
“It’s inevitable that adoption of technology will have an impact on claims teams - both on their size and their role in the wider insurance business,” commented Michael Cook, claims advisory leader at PwC. “This does not mean that the days of human involvement in claims are over - there will always be a role for human expertise and judgement.
“The future role of a claims professional will largely be driven by the type of claim - simpler settlements will be dealt with through technology, freeing up time for experts to work on more complex claims. New roles will also be created including a customer concierge, new product development such as parametric driven insurance for climate change, and the provision of loss prevention services.”
The PwC report suggests some actions insurers can take to adapt to this changing claims environment:
- Senior leaders need to view the impact of automation on the workforce as a strategic decision – it’s too important to just be left to IT or HR.
- Start to make ‘no regret’ decisions that work with a number of future scenarios.
- Address recruitment policies to understand how to attract new people from different talent pools.
- Nurture training, agility, re-training and adaptability within the workforce.
- Communicate with the workforce about what automation means for them, what they need to do to progress in the future and what support it planned.
Lee Elliston, claims director, Lloyd's Market Association, added: “The LMA Future of Claims Forum was launched to address the changing approach to claims and what that will mean for claims roles. In addition to technology, change is being driven by increased customer service expectations, prompting the need for a more customer-centric approach and the removal of processes that add no or little value.
“The forum kicks off with today’s event, which will assess the potential impact to individual roles and also the skills, approach and requirements of future claims teams. It will focus on the opportunities and challenges arising from automation and digitalisation, as outlined in PwC’s study, to support the market as it adapts and leverages talent from outside the industry, while understanding the development and training needs to reskill the existing workforce.”